Special rules provided for tax-favored withdrawals, repayments,
and loans from certain retirement plans for individuals who suffered economic
losses as a result of the May 4, 2007, Kansas storms and tornadoes and applied
to distributions received before 2009 as qualified recovery assistance
distributions (defined later). While qualified recovery assistance distributions
cannot be made after 2008, the special rules explain how much of a qualified
distribution has to be included in income after 2008, and when an amended return
must be filed to reduce the amount of a qualified distribution previously
included in income as a result of a repayment after 2008.

Except as provided below, a qualified recovery assistance distribution
is any distribution you received and designated as such from an eligible
retirement plan if all of the following apply.

The distribution was made after May 3, 2007, and before January
1, 2009.

Your main home was located in the Kansas disaster area on
May 4, 2007. For a definition of main home, see Publication 4492-A, Information
for Taxpayers Affected by the May 4, 2007, Kansas Storms and Tornadoes.

You sustained an economic loss because of the storms and tornadoes.
Examples of an economic loss include, but are not limited to:

Loss, damage to, or destruction of real or personal property
from fire, flooding, looting, vandalism, theft, wind, or other cause;

Loss related to displacement from your home; or

Loss of livelihood due to temporary or permanent layoffs.

If (1) through (3) above apply, you can generally designate any
distribution (including periodic payments and required minimum distributions)
from an eligible retirement plan as a qualified recovery assistance
distribution, regardless of whether the distribution was made on account of the
storms and tornadoes. Qualified recovery assistance distributions are permitted
without regard to your need or the actual amount of your economic loss.

The total of your qualified recovery assistance distributions
from all plans was limited to $100,000. If you had distributions in excess of
$100,000 from more than one type of plan, such as a 401(k) plan and an IRA, you
could have allocated the $100,000 limit among the plans any way you choose.

A reduction or offset after May 3, 2007, of your account balance
in an eligible retirement plan in order to repay a loan could also have been
designated as a qualified recovery assistance distribution.

Qualified recovery assistance distributions are included in income
in equal amounts over three years. However, if you chose, you could have
included the entire distribution in your income in the year it was received.

Qualified recovery assistance distributions are not subject to
the additional 10% tax (or the additional 25% tax for certain distributions from
SIMPLE IRAs) on early distributions from qualified retirement plans (including
IRAs). However, any distributions you received in excess of the $100,000
qualified recovery assistance distribution limit may be subject to the
additional tax on early distributions.

If you choose, you generally can repay any portion of a qualified
recovery assistance distribution that is eligible for tax-free rollover
treatment to an eligible retirement plan. Also, you can repay a qualified
recovery assistance distribution made on account of a hardship from a retirement
plan. However, see
Exceptions
below for qualified recovery assistance distributions you cannot
repay.

You have three years from the day after the date you received
the distribution to make a repayment. Amounts that are repaid are treated as a
qualified rollover and are not included in income. Also, for purposes of the
one-rollover-per-year limitation for IRAs, a repayment to an IRA is not
considered a qualified rollover. See Form 8915 for more information on how to
report repayments.

If you make a repayment in 2010, the repayment may reduce the
amount of your qualified recovery assistance distributions that were previously
included in income. You may need to file an amended return to refigure your
taxable income if:

You elected to include all of your qualified recovery assistance
distributions in income in the year of the distributions (not over 3 years) on
your original return, and

The amount of the repayment exceeds the portion of the qualified
recovery assistance distributions that are includible in income for 2010, and
you choose to carry the excess back to your 2009 (or if applicable, 2007 or
2008) tax return.

File Form 1040X to amend a return you have already filed. Generally,
Form 1040X must be filed within 3 years after the date the original return was
filed, or within 2 years after the date the tax was paid, whichever is later.